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News on Credit Derivatives: Department of Justice likely to scale back CDS investigation


Department of Justice likely to scale back CDS investigation

December 1, 2013

After four years of investigating through volumes of trading data, messages, emails and documents about credit-default swaps, the US Department of Justice is now thinking of winding down an investigation into allegations of anti-competitive behaviour in the $24.3trillion market for credit-default swaps without charges on the banks. Prosecutors had scrutinized Markitt and the major banks that were alleged to control the trading-data provider, including Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley.

The banks, which act as dealers, were accused of conspiring to stop exchanges and other outsiders from participating in the market by refusing to supply information to other exchanges and outsiders. The DOJ's move comes amid new regulations that are designed to increase competition. However, the probe remains open and prosecutors are continuing to monitor an investigation initiated by the European Commission.

Reported by Shambo Dey

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